Contactless Payment Market to Reach $12,476.6 Billion
Contactless payments have become very popular, especially since the pandemic. It is a secure method for consumers to buy goods and services using a debit, credit, smartcard, or another payment device.
Surge in demand for mobile & wearable payment devices, rise in adoption of contactless payments among merchants, and numerous benefits provided by contactless payments fuel the contactless payment market growth. However, difficulties in the replacement process of POS terminal and security issues associated with technology are expected to hamper the market growth. On the contrary, integration of IoT in contactless payment technology and untapped potential of emerging economies are some of the factors expected to create lucrative opportunities for the contactless payments market growth in the upcoming years.
The COVID-19 pandemic positively impacted the contactless payments market. The pandemic across the globe prompted widespread changes in consumer behavior and preferences, accelerating the adoption of contactless payments.
The fear of virus transmission through physical contact prompted a shift away from traditional payment methods such as cash and chip-and-pin cards. Furthermore, many governments and health organizations encouraged the use of contactless payments to reduce the spread of the virus. This resulted in increased awareness and promotion of contactless transactions, driving its adoption.
Based on device type, the smartphones and wearables segment held the highest market share in 2022, accounting for nearly three-fifths of the global contactless payment industry revenue, and is estimated to maintain its leadership status throughout the forecast period, owing to the rising penetration of smartphone devices used for making payments among the youth population across the globe. The use of digital wallets for making contactless payments through smartphones has increased the usage of smartphones in everyday tasks and activities. Furthermore, innovations in wearables, such as payment watches for making contactless payments, are expected to propel the segment's growth. However, the smart cards segment is projected to manifest the highest CAGR of 21.0% from 2023 to 2032, owing to the growing adoption of contactless cards, such as credit and debit cards for making payments in sectors such as BSFI, retail, transportation, and hospitality.
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